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7/7/18

The top three most visited IKN posts this week are...

...in reverse order:
.
Third Place: "The small print". Ah, the mystery.

Second Place: "The pump and dump stock swindler Bobby Genovese will indeed get his day in court". Bobby G will be happy to know he's been popular this week.

 
First Place: "New Gold (NGD): Betting the farm and losing". It's the balance sheet, stupid.

7/6/18

The Friday OT: Paul McCartney carpool karaoke

It's had squillions of views since it came out a few days ago. That doesn't matter, you still have to watch this. Or watch it again.



A jewel all the way through, but that last segment...wow. Youtube here.

It's war!

Trade war!


Face facrs: When the numbskulls running the Euro are your safe haven, we're FUBAR.

7/5/18

Happy Anniversary, Tahoe Resources (TAHO) (THO.to)

Congratulations Ferrari Kev and Ron Clay...ah no, he's left. Anyway, congrats due to Tahoe Resources as your suspension of operations at Escobal is now one year old.

And counting.
And they said it would never last.
Well, Tahoe said that.
Any more predictions, guys?

UPDATE: You people really should be on Twitter, too much fun:



Come on over, plenty of room for more. Edie? Kev? Want some tips on how to win friends and influence people on social media? Start here.

AgendAR on Argentina's runaway inflation rate

Here's a translation of this report from AgendAR, the new(ish) Argentina news aggregator site that I'm getting to like a lot. Independent, no pro/anti government line, plenty of on-point business and economy coverage.

Inflation for June 2018 is set to come in between 3.5% and 4.1%, due to the acceleration caused by the deep devaluation in the Peso. In this way Argentina has breached the 15% inflation target set by the government for the whole of 2018.

The Mauricio Macri administration originally said that inflation would be between 8% and 12% for this year, later raising the forecast to 15%. The June figure means this annual figure has been beaten in the first six months of the year.

Now the Finance Minister, Nicolás Dujovne, is betting on inflation ending the year at around 27%, that's to say 2.2% higher than in 2017, which in turn kills the government's ideas about how it would slow down inflation.

According to the private consultancy firm Elypsis, initial survey data indicate June monthly inflation at 3.8% at a national level, a rapid acceleration compared to May when the indicator showed month-on-month inflation at 2.6%. for slowing (continue).

Do like this humble corner of cyberspace, put AgendAR on your agenda.


Pretium (PVG) ramping into Q2 production NR

An interesting move on an otherwise quiet day:



PVG is about a week away from giving us its 2q18 preliminary production figures, too. No position in this one.

7/4/18

The small print

From the latest set of financials of a junior mining company. Potentially useful reference material.

On August 11, 2017, the Company entered into an amendment to the US $60,000 credit facility (the “Amended Credit Facility”). Under the terms of the Amended Credit Facility, principal repayments were to commence on April 1, 2018, in equal monthly amortization amounts of $1,600 with a maturity date of April 1, 2019, at which time the remaining balance was due. The Amended Credit Facility bears interest at a rate of the higher of LIBOR or 1%, plus 11%, compounded monthly, and the interest is capitalized. The Amended Credit Facility continues to include a production payment of $30 per ounce payable on the first 405,000 ounces of gold produced. The Amended Credit Facility is secured by all of the Company’s property and assets. As at March 31, 2018, considering the various features of the Amended Credit Facility, the effective interest rate is approximately 14%.
The 2017 amendment was accounted for as a modification of debt. Under IAS 39, the effect of the modification was deferred and amortized over the remaining life of the credit facility on an effective interest rate basis. The impact of the modification was adjusted on adoption of IFRS 9 to record the impact of the changes on the carrying value of the debt at the original effective interest rate of approximately 14.5%
Subsequent to March 31, 2018, the Company entered into the Forbearance Agreement with the Lenders, pursuant to which the Lenders deferred the Company’s requirement to make the April 1, May 1, and June 1, 2018, amortization payments and agreed to refrain from exercising any rights or remedies under the Amended Credit Facility until June 15, 2018. The Company is currently working with its Lenders to amend the terms of the Amended Credit Facility.
For the three months ended March 31, 2018, the Company capitalized $2,996 of interest on the Amended Credit Facility to construction work in progress in property, plant and equipment.


The Company is required to maintain the following financial covenants, commencing July 1, 2018:
a) as of the end of each fiscal quarter, Debt Service Coverage Ratio on a rolling four fiscal quarter basis of at least 1.5:1;
b) as of the end of each fiscal quarter, EBITDA to Interest Coverage Ratio on a rolling four fiscal quarter basis of at least 5:1; and
c) as of the end of each fiscal quarter, Debt to EBITDA Ratio on a rolling four fiscal quarter basis of no greater than 2:1.



More on the Minatura investigation: Claudia Herrera arrested on money laundering charges

Further to yesterday's post, it turns out that Claudia Herrera, country manager for Cordoba Minerals (CDB.v) and VP Corp Dev at Minatura, was one of four Colombian nationals arrested in a synchronized raid by police investigating serious crimes. Herrera was in fact in a meeting with Cordoba management when she was arrested (the other Cordoba Minerals people at first thought the arresting officers were a security detail there to escort her to her next meeting) and remanded into custody. She and three others have been charged with being the ringleaders of a money laundering operation, as well as facing connected conspiracy charges. These are very serious charges in Colombia and often conetced there with drug trafficking and suchlike.

We hear that CDB.v has cut all ties to Herrera since her arrest and, in Colombia, has stated to inquiries that the charges have nothing to do with the company. Perhaps they would be kind enough to tell their shareholders in Canada the same thing. In a NR in English.

Copper. Gut check. Gut bad.

So much for my gut call on copper yesterday and how that $2.90 line would hold and we'd be over $3.00/lb in a jiffy. Less than 24 hours later...



In other news, my fave mail received today was on the news that Wheaton Precious Metals (WPM), once upon a time Silver Wheaton, was ploughing cash into Adventus Zinc (ADZN.v), this coming after its just closed deal on the cobalt stream out of Voisey's Bay. Reader C entitled it "WPM soon to be renamed WST (Wheaton Stuff & Things)". Made me laugh, just thought I'd share.


x

The pump and dump stock swindler Bobby Genovese will indeed get his day in court

Whether he wants it or not. Here are a couple of excerpts from this Mike Caswell Stockwatch report (also here)

Ontario's Bobby Genovese has lost a motion to dismiss civil charges that he faces from the U.S. Securities and Exchange Commission over the manipulation of Liberty Silver Corp. in 2012. He had argued that the charges were unacceptably vague and fell short of making a case for securities fraud. Unfortunately for Mr. Genovese, a New York judge has determined that the allegations are sufficient for trial.
The ruling is part of a case in which the SEC cited Mr. Genovese for his sale of $17.5-million worth of Liberty Silver shares. (All figures are in U.S. dollars.) The regulator had accused him of touting the stock without disclosing his sale of millions of shares. Among other things, he arranged for promotional newsletters and enlisted the help of a New York brokerage to boost the company, the SEC said.
Mr. Genovese had asked that the judge drop the case, saying the SEC provided so few details that the matter was not worth taking to trial. In a motion to dismiss filed on Feb. 2, 2018, he contended that there was nothing to indicate that he misled anybody in selling his Liberty Silver shares. He claimed that he had repeatedly disclosed his interest in the company. Mr. Genovese also questioned if any rational investor would stay away from the stock simply because he intended to sell his shares for a profit.

The matter landed before U.S. District Court Judge Richard Sullivan, who has ruled entirely against Mr. Genovese. In a relatively brief decision, dated June 29, 2018, the judge has determined that parts of the SEC's case, in legal speak, "clearly satisfy the materiality elements" as well as the "particularity requirement." In other words, the allegations are strong enough to proceed.

AND

That trial will hear allegations that the SEC set out in a civil complaint filed on Aug. 1, 2017, in the Southern District of New York. The case centred around the 2012 manipulation of Liberty Silver, a purported exploration company. At the time Liberty Silver traded on the Toronto Stock Exchange and on the OTC Bulletin Board. (It has since rolled back 1:15 and is now known as Bunker Hill Mining Corp. The company is not a defendant in the case.)
The SEC claimed that Mr. Genovese was behind an effort to tout the stock through newsletters and through presentations to brokers. According to the SEC, he told a group of brokers in New York that he expected Liberty Silver to go to $7. He failed to disclose that he was a substantial shareholder and that he planned to sell his stock, the SEC said. Around the same time, Mr. Genovese was arranging to have newsletter writers publish promotional pieces about Liberty Silver, the SEC claimed. One unidentified Canadian newsletter writer received a $30,000 set of speakers for his efforts, according to the complaint.
The SEC further accused Mr. Genovese of executing wash trades in support of the scheme, with those trades beginning on Oct. 3, 2012. The trading boosted the stock by 10 cents to $1.43, the SEC claimed. Two days later, on Oct. 5, 2012, the SEC ended the scheme by imposing a trading halt on Liberty Silver. By that time, Mr. Genovese had sold $17.5-million worth of shares, generating an $8-million profit, according to the complaint.


That'd be James West with those speakers, right? Read the whole thing for more

7/3/18

Colombia: Minatura International LLC is under Interpol investigation

Word reaches these shores that there's a big operation going on in Colombia by Interpol (with the US SEC somewhere in the background because it's a Delaware registered company), in the advanced stages of investigation for fraud at Minatura International, a private company in the gold mining business and holders of many properties in Colombia. 

This may be the reason why Claudia Herrera, who was VP Corp Dev for a long time at Minatura, then went on to be Vice-President of the country's mining association as well as country manager at Cordoba Minerals (CDB.v), has been quietly shown the door at CDB in the last few days. And it's also interesting to see how many times the word "Minatura" comes up in other searches, for example here:
Pursuant to an agreement signed on 6 June 2011 and restated on 26 July 2011, Cordoba Minerals (then called Wesgold Minerals Inc.) acquired from Minatura International LLC (Minatura), a private Delaware limited liability corporation, an initial 11% interest in Cordoba Holdings Corp. (Cordoba Holdings), a private company registered in British Columbia, which holds indirect title to the Cordoba Project. The consideration was a payment to Minatura of CDN$2,030,000 in cash and forgiveness of a loan of CDN$2,000,000 for a total cash cost of CDN$4,030,000, plus issue of warrants to purchase up to 5,000,000 shares of Cordoba Minerals exercisable at CDN$0.40 per share with a fair value of CDN$400,000.

UPDATE: A representative of Cordoba Minerals told this desk that Ms Herrera is no longer with the company in order that she can focus on her personal issues, and that said issues have nothing to do with CDB.

Eike Batista sentenced to 30 years in jail

Okay gold mining freaks and nerds, who remembers Eike Batista? Yep him, the oil dude who bought Ventana Gold (ex- VEN.to) for oodles. Well, this out a couple of hours ago:


Justiça condena Eike Batista a 30 anos de prisão


You don't need strong Portuguese skills to get the gist. Find your own English language version on Reuters or something.

Sandstorm Gold (SAND) (SSL.to): On rails

Another solid quarter from SAND:



After two quarters, SAND is now at 29,135ozAuEq for 2018. With Cerro Morro declaring commercial production ahead of time and SAND having a juicy stream on that one, the chances that SAND beats the 60k upper guidance range are pretty good. More in IKN476, subbers. NR here.

Nine months of sell side coverage on Tahoe Resources (TAHO) (THO.to)

This is what happens when you don't lift a finger to do even the slightest bit of basic investigation, cover companies in countries where you don't speak the language, use the company IR department as your only source of information and are under threat from your corner office boss to suck up to Ferrari Kev at all times.



And then they complain that business is bad, that clients are turning their backs in droves and don't understand why.

7/2/18

A copper chart

FWIW, my gut says this line holds and we move back above U$3.00/lb in the next few days.


So, my guy against your charting.

New Gold (NGD): Betting the farm and losing

Here's the carrying value of NGD properties per quarter split into two piles: Rainy River and Everything Else:


What amazes me isn't that Rainy River is now over 50% of the total of everything at NGD, what amazes me is that NGD still thinks this thing is worth U$1.6294Bn. 

Consider that back in January 2014, when NGD had recently bought Rainy River and carried it on its books at U$394.6m, it told us that the development capital costs of the project would be, "$885 million inclusive of a $70 million contingency."Does this mean that an over-cost, overdue mine that is under-performing, producing far less gold than planned and making an operating loss has goodwill of U$349.8m?

Hey...let's call it $350m, just for fun.

Seriously, how stupid do these people think we are?


The IKN Weekly, out now


Prednisone, if you were wondering


IKN475 has just been sent to subscribers. Lots of things on lots of things. Well, on mining things anyway.

7/1/18

Trading in GDX is weird

I stuck this on the Twittermachine Friday evening, after the normal end-week data dump had filled my XLS charts.
 
You're not supposed to get much comeback from a wonky financials post on a Friday evening but from the number of RTs and Likes, it's not just me that thinks this is odd. Text of Tweet here:
Something bizarre: The last 7 WEEKLY closes of $GDX are:
May 18th: $22.19 
May 25th: $22.31 
June 1st: $22.31 
June 8th: $22.36 
June 15th: $22.23 
June: 22nd: $22.18 
June 29th: $22.31 A spread of 18c? 
A 0.8% max variation over 7 weeks? 3 closes out of 7 at exactly $22.31? WTF?